The State Ordains, The Towns Pay

April 22, 1988

The Illinois legislature is getting very good at passing the buck, in the literal sense.

School officials have wailed about this for years, to the point where hearing the word mandate is like listening to fingernails scraping on a blackboard. The legislature specializes in layering on wonderful-sounding school programs without providing a penny to help pay for them.

Now municipal officials around Illinois are toting up the potential impact of a new state mandate slapped on them: a legislative-ordered increase in police and fire pension funds. It, too, is a wonderful gesture on behalf of public servants who probably deserve it, but it leaves the towns and cities with the small detail of figuring out how to pay for it.

Actually, they do know how to pay for it-higher local property taxes. But this is one more burden they don`t need when pension funds already are suffering from lower interest rates on their investments.

The plan provides for an increase from 2 to 3 percent in pension cost-of- living benefits, with the eligible age reduced from 60 to 55. In many cases, that will mean retroactive payments to people already retired as well as payments at earlier ages; further, people retiring earlier than 55 can collect the increase retroactively when they reach that age. The new plan also figures police pensions from the salary on the last day of work, not the last year, bringing police in line with a benefit the firefighters already have. And it also gives firefighters a new edge: For those already retired, the increase will be based on the current pension, while for police it will be based on the first year`s pension.

It does not take a math whiz to figure out that all of this will cost municipalities a lot more money, a lot earlier than they anticipated. How much more is not clear, because the plan provides a strong incentive for more police officers and firefighters to retire early-an impact that has not yet hit. But as one example, Elmhurst already has calculated that its pension funding will soar nearly 60 percent in 1989, jumping to $691,000 from $439,000 this year.

There ought to be a law about this sort of thing, one that says there can`t be any more state laws that dump extra expenses on local taxing bodies unless the legislature is willing to help pick up the tab. Until it is willing to bite the bullet on higher state taxes for a growing list of state problems, it at least should stop spending other people`s money.